GM decides to “Make it in Michigan”

The offer of $1 billion in tax incentives and training support was probably too good to resist.

The automaker announced that it will be building small cars at its Orion Township assembly plant, choosing it over plants in Janesville, Wis., and Spring Hill, Tenn.

Initially, GM had planned to pay lower wages in China and import its new small car from the Asian country. But the company agreed to build the car in the United States instead, after agreeing to a deal with United Automobile Workers union in May.

Michigan’s lure
To encourage the automaker towards its Orion plant, the state came up with a $779 million, 20-year Michigan Economic Growth Authority (MEGA) tax credit package. Besides, a 25-year 100 percent personal property tax abatement, which could be worth $100 million over the time span, was offered by Orion Township.

In addition to the employment at the Orion plant, some jobs will also be retained at the Pontiac plant, which will supply body panels and structural components and is located about five miles away from Orion. About 1,400 workers are expected to be employed at these sites.

Turnaround at Orion and Pontiac
The Orion and Pontiac plants were among the factories that were scheduled to close when GM filed for bankruptcy protection. However, Michigan succeeded in saving jobs at these plants by enticing the automaker, which is undergoing reorganization in bankruptcy court.

GM is assuming a successful close of negotiations over incentives from state and local officials.

“Small cars represent one of the fastest-growing segments in both the U.S. and around the world,” said, Troy Clarke, president of G.M. North America. “G.M. will be the only automaker, foreign or domestic, to build small cars in the U.S., and we believe Orion Assembly and Pontiac Stamping are well suited to deliver a high-quality, fuel-efficient car that competes with anything in the marketplace.”

“Make it in Michigan”
“Proximity to suppliers was a significant advantage, especially when it came to heavy materials such as axles and transmissions,” said, Rep. Gary Peters, whose congressional district includes the Orion plant.

Peters led a “Make it in Michigan” campaign, signed by 30,000 people, created a website and ran radio advertisements to convince G.M. to choose Michigan.